Public health and TRIPS

International conventions before TRIPS did not specify minimum standards for patents. Over 40 countries provided no patent protection for pharmaceuticals, many provided only process and not product patents, and the duration of patents was much less than 20 years in many countries.

From the health sector’s perspective, intellectual property standards, including those specified in TRIPS, should take protection of public health into account. However, current standards - historically derived from those of developed countries - are not necessarily appropriate for countries struggling to meet health and development needs. Developing countries can therefore use the flexibility of TRIPS provisions and its safeguards to protect public health.

Patentability

What can be patented? TRIPS specifies patents must be available for all discoveries which “...are new, involve an inventive step and are capable of industrial application (Article 27).”

The difference between the number of new drugs (“new chemical entities”) that are developed globally each year, and the number of patents awarded for new uses of a drug, processes, dosage forms, formulations and different forms of the same molecule, including patents on genes and genomic sequences is enormous. The latter is influenced by national legislation and practices.

Yet because “new” and “inventive” are not defined, countries must establish their own criteria for these terms. They should recognize that patentability standards which are too broad can contribute to “evergreening”. This means that the effective patent life for a new medicine is extended beyond the 20-year TRIPS minimum. Therefore, Ministries of Health must work closely with other ministries to formulate and/or revise national patent legislation to ensure that it takes public health needs into account.

Generic drugs

Promotion of generic drugs requires appropriate legislation and regulations, reliable quality assurance capacity, professional and public acceptance of generic drugs, and economic incentives and information for both prescribers and consumers. The TRIPS Agreement does not prevent Members from requiring generic labelling and allowing generic substitution.

Trade liberalization can increase competition and reduce prices for generic drugs that are already on the market. But if the wording and implementation of TRIPS-compliant national legislation and regulations are inappropriate, the introduction of new generic drugs can be delayed. The economic cost to governments, households and public health can be enormous.

Box 2 - Articles of the TRIPS Agreement of greatest relevance to pharmaceuticals

Topic(TRIPS Article)

Key phrasing from TRIPS agreement(Note that a number of articles contain further specific conditions, exceptions and exemptions which are spelled out in TRIPS or other referenced agreements.)

Nondiscrimination(Articles 3 and 4)

“National Treatment...Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property...”“Most-Favoured-Nation Treatment...With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members...”

Parallel importation(“exhaustion of patent rights”)(Article 6)

“Exhaustion...For the purposes of dispute settlement under this Agreement, subject to the provisons of Articles 3 [National Treatment] and 4 [Most-Favoured-Nation Treatment], nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.”

Objectives of TRIPS(Article 7)

“Objectives...The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”

Protection of public health(Article 8)

“Principles...Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.”

Process and product patents(Article 27)

“Patentable Subject Matter...patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application...[P]atents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.”

Subject matter which may be excluded from patentability(Article 27)

“Patentable Subject Matter...Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health...”“Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes.

However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.”

“Exceptions to Rights Conferred...Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.”

Compulsory licensing(Article 31)

“Other Use Without Authorization of the Right Holder...Where the law of a Member allows for other use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the [twelve] provisions shall be respected.”

20-year minimum term of protection(Article 33)

“Term of Protection...The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date.”

Reversal of burden of proof for process patents(Article 34)

“Process Patents...Burden of Proof...For the purposes of civil proceedings in respect of the infringement of the rights of the owner...if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process.”

“Developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base...[and] shall provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in favour of developing and least-developed country Members.”

Mailbox filings(Article 70:8)

“Where a Member does not make available as of the date of entry into force of the WTO Agreement patent protection for pharmaceutical and agricultural chemical products commensurate with its obligations under Article 27, that Member shall:

(a) notwithstanding the provisions of Part VI, provide as from the date of entry into force of the WTO Agreement a means by which applications for patents for such inventions can be filed...”

Review(Article 71:1)

“The Council for TRIPS shall review the implementation of this Agreement after the expiration of the transitional period referred to in paragraph 2 of Article 65. The Council shall, having regard to the experience gained in its implementation, review it two years after that date, and at identical intervals thereafter. The Council may also undertake reviews in the light of any relevant new developments which might warrant modification or amendment of this Agreement.”

Prompt introduction of generic drugs can be facilitated by: drafting appropriate legislation and regulations on patentability; use of exceptions to exclusive rights which permit early testing and approval of generics (“Bolar” provision) (including allowing access to pre-registration test data); and compulsory licensing. (See further reading list.)

Compulsory licensing

Compulsory licensing enables a competent government authority to license the use of an invention to a third party or government agency without the consent of the patent-holder. The patent-holder, however, retains intellectual property rights and “shall be paid adequate remuneration” according to the circumstances of the case (Article 31). In the pharmaceutical sector compulsory licenses have been used to stimulate price-lowering competition and to ensure availability of needed medicines. Most developed countries and many developing countries now provide for compulsory licensing through national legislation.

Box 3 - Checklist for policy-makers

Government process and resources:

q Identify trade-and-pharmaceuticals focal point within Ministry of Health.

q Establish contacts, perhaps a working group, with trade and other key ministries.

q Obtain reliable specialized legal advice.

q Develop a mechanism to monitor the health impact of new trade agreements.

A comprehensive patent regime should include adequate provision for the granting of compulsory licenses. Grounds for compulsory licensing may include public interest, problems linked with national emergencies such as epidemics, public noncommercial use, or anti-competitive practices (Article 31). Whether or not compulsory licenses are issued, national legislation which provides for compulsory licensing allows governments to provide the medicine in the case of abuse of rights by the patent-holder, or commercial non-availability. Any such use should be authorized predominantly for the supply of the domestic market of the Member authorizing such use (Article 31f).

Compulsory licenses must be granted on a nonexclusive basis. Since the TRIPS Agreement provides for non-discrimination between locally produced and imported products (Article 27:1), a compulsory license may be granted for importation to satisfy local needs (Article 31).

Parallel importation

Parallel importation is importation, without the consent of the patent-holder, of a patented product marketed in another country either by the patentholder or with the patent-holder’s consent. Parallel importation enables promotion of competition for the patented product by allowing importation of equivalent patented products marketed at lower prices in other countries. If the importing country’s patent regime provides that the patent-holder’s right has been “exhausted” (in TRIPS terminology) when the patented product has been placed on the market in another country by or with the consent of the patent-holder, the patent-holder cannot use his/her patent right in the importing country to prevent parallel importation.

Article 6 of the TRIPS Agreement explicitly states that practices relating to parallel importation cannot be challenged under the WTO dispute settlement system, provided that there is no discrimination on the basis of the nationality of the persons involved. It is widely understood to mean that parallel importation is effectively a matter of national discretion.

TRIPS-plus provisions

“TRIPS-plus” is a non-technical term which refers to efforts to: extend patent life beyond the 20-year TRIPS minimum; limit compulsory licensing in ways not required by TRIPS; and limit exceptions which facilitate prompt introduction of generics.

Since the public health impact of TRIPS requirements have yet to be fully assessed, WHO recommends that developing countries be cautious about enacting legislation that is more stringent than the TRIPS requirements.

Non-WTO Members

As of December 2000, over 50 WHO Member States were either not WTO Members or had observer status only at the WTO. From a public health perspective, countries which are not bound by TRIPS should evaluate TRIPS requirements, and incorporate into national legislation and trade-related practices those elements which clearly benefit national public health interests.